The AMERIGROUP entities have been instrumental for capturing Medicaid growth opportunities in the states where Anthem does not have Blue licenses. The rating upgrades of the AMERIGROUP affiliates reflect closer integration with Anthem and greater importance of the Medicaid segment for Anthem’s overall strategy and growth. In addition, various non-regulated business under the Anthem organization, including pharmacy benefit management, complex and home care management and behavioral health administration add a competitive advantage in all lines of business and allow for cost efficiencies.

AMERIGROUP entities operate in an additional 12 states in the Managed Care Medicaid segment, further expanding Anthem’s footprint. In addition, Anthem Health expanded its individual exchange product offerings over the past two years.

Strong penetration into national accounts and large group markets continue to support Anthem Health’s leading market position. The group has good product and geographic diversity, as Anthem operates Blue Cross Blue Shield plans in 14 states with excellent brand recognition and leading market shares in the majority of its states. Furthermore, through nine months of 2021, Anthem Health saw elevated claims costs related to a higher-than-anticipated volume of COVID-19 testing, which may pressure full-year 2021 earnings. This trend is in line with the industry and AM Best expects it to continue. Earnings compression was due to faster growth of lower-margin Medicare Advantage and Medicaid lines of business, as well as initiatives taken by Anthem to support members and providers during the COVID-19 pandemic and to lower risk-adjustment revenues in 2021 given the lower level of member visits with physicians in 2020 due to the pandemic. Profitability metrics remains strong, although they declined in 2020, with a return on revenue (ROR) of 4% and return on equity (ROE) of 22.9%, compared with ROR of 4.5-5.3% and ROE in the 27-30% range in 2016-2019. The Anthem Health entities generated underwriting gains in excess of $4 billion over the past five years however, underwriting results declined each year since 2018. Anthem Health’s reported earnings are generally stable and strong, albeit with some fluctuations at the product and entity level. The Anthem Health entities have been able to grow capital and support the premium growth despite sizeable dividend payments. The Anthem Health entities comprise the main source of earnings and dividends for the parent organization, Anthem, with dividends from subsidiaries exceeding $3 billion in each of the past three years, although projected to be slightly lower in 2021. The ratings reflect Anthem Health’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.Īnthem Health’s risk-adjusted capitalization is viewed as strongest, as measured by Best’s Capital Adequacy Ratio (BCAR). See below for detailed listing of the companies and Long- and Short-Term IRs. The outlook of these Credit Ratings (ratings) is stable. (Indianapolis, IN).įurthermore, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of the members of UNICARE Life & Health Group (UNICARE) a subsidiary of Anthem. At the same time, AM Best has affirmed the Long-Term ICR of “bbb+” (Good), the Long- and Short-Term Issue Credit Ratings (Long-Term IR Short-Term IR) of Anthem and the Long-Term IR on the existing surplus notes of Anthem Insurance Companies, Inc. All companies listed above are collectively referred to as Anthem Health. Concurrently, AM Best has upgraded the FSR to A (Excellent) from A- (Excellent) and the Long-Term ICR to “a+” (Excellent) from “a-” (Excellent) of various AMERIGROUP affiliates. (Anthem) (Indianapolis, IN), as well as its branded life insurance subsidiaries. AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” (Excellent) of the core Blue Cross Blue Shield-branded insurance subsidiaries of Anthem, Inc.

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